EverCommerce Inc (EVCM) PT Raised to $8 at Goldman Sachs

Goldman Sachs analyst Gabriela Borges raised the price target on EverCommerce Inc (NASDAQ: EVCM) to $8.00 (from $7.50) while maintaining a Sell rating.

The analyst comments "EverCommerce was up 4% on May 11 after reporting revenue 2% above the Street and EBITDA margins ~200bps above (FactSet). Management maintained full year guidance. EverCommerce noted that the macro environment was similar in 1Q24 vs. 4Q23 with essentially normal seasonal trends. We believe the key medium-term focus for the stock continues to be what normalized growth and margins will be post the 2024 period of business optimization. Recall that EverCommerce has identified several initiatives to streamline the portfolio, create organizational alignment, and push brand and product consolidation with the goal of exiting 2025 with these transformations in place on a run rate basis. 1) For revenue synergies, the focus is on driving go to market efficiencies by offering a suite of solutions rather than siloed products. By integrating products more tightly, management sees substantial cross-sell benefits as friction between software and payment reps reduces. This effort helps address one of our key concerns over the past 1.5 years on the stock i.e. EverCommerce's ability to cross sell. 2) With targeted cost efforts, management expressed confidence in achieving 100-200bps of margin expansion over the next several years (we believe a greater amount of expansion may be possible and await further details) while also reinvesting in the business to accelerate growth. Taken together, we look to 2H milestones to better understand EverCommerce's ability to execute on a simplified go to market strategy to maximize growth with a consolidated product suite. We maintain our Sell rating and raise our price target to $8.00 (from $7.50) on higher FCF."

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